– Total Revenue (TR) which is calculated as number of products sold times unit price

– Total Fixed Costs (TFC) generally this number will not change unless the analysis is for a large range / changes in the revenue

– Total Variable Cost (TVC) which varies directly with the number of products sold

The Profit (P) is calculated as total revenue minus total cost:

P = TR –TC

Where:

TR = Unit Price x Units Sold

TC = TFC + TVC

The Break-Even Point shows the number of units the company must sell in order to break even or generate zero profit. The Break-Even Revenue shows the revenue the company must make in order to break even or generate zero profit.

Free excel download: Break-Even Chart for Microsoft Excel – This excel break-even analysis chart creates chart with +/- 50% of the revenue you specified so you can see how sensitive is your business model and cost structure.